The Perks (And Pitfalls) Of Being A Kickstarter

Founded in 2009, Kickstarter (an American-based private for-profit company) was created to help people raise funds for their passion projects via the Kickstarter website through crowd funding (getting money from the public via internet).

In the beginning, Kickstarter was known as the destination site for crowd funding and indie films, music, shows, comic books, video games and the like were having a nice amount of success there. And being that people couldn’t invest but rather “back” a project in the form of a pledge, there was no profit to be had for the “backer” but instead would receive a special reward of some kind; usually custom made and unique to make the backer feel special, these were known as “perks”.

The Kickstarter creators also set guidelines for proposed projects that included creators can only fund projects, projects must fit in one of the 13 creative categories and that they can NOT use the site for charity and awareness campaigns. The guidelines for hardware and product designs had other rules like banning the use of photorealistic renderings and simulations demonstrating a product, limiting awards to single items or a “sensible set” of items relevant to the project (e.g. multiple light bulbs for a house), a physical prototype and manufacturing plan.

When Kickstarter made their project rate numbers public in 2012, the numbers were staggering. We’re talking (as of October 2012) there were 73, 620 launched projects with roughly a 44% success rate and total number of funds pledged at $381 million.

MILLION.

Since launch, more and more eyes were on the Kickstarter prize right around 2012 when Casey Hopkins’ iPhone dock became the first project to break $1 million in pledged funds followed quickly a few hours later by Tim Schafer’s Double Fine Productions (a vg development studio) and 2 Player Productions hit the $1 million mark in funding within eight hours for their game, Double Fine Adventure. When the smoke cleared, DFA had 87,142 backers and raised $3,336,371 FAR beyond the intended $400k goal. I covered this project for my day job and the reason Double Fine and 2 Player were able to raise WELL over the asking price is because they’re a tried and true development studio with an a LONG and amazing track record of creating games not only for the hardcore gamer but family friendlies as well.

Other notable Kickstarter-funded projects include two documentaries nominated for Academy Awards, art projects ending up at MoMA, successful record albums and films accepted into Sundance, SxSW and Tribeca Film Festivals (respectively).

Not wanting to be known as a “store”, Kickstarter began cracking down on hardware projects. Co-founder Yancey Strickler in a recent interview with Fast Company said “We didn’t want the company to be involved in a hype cycle. People were connecting Kickstarter with how startups get made, or comparing us to venture capital. But those are not our communities.”

That said, it seems like Kickstarter is becoming a bit of a hype cycle now that A-list actor Kristen Bell, who (along with Veronica Mars creator Rob Thomas) decided to propose a project of their own.

Kristen Bell as Veronica Mars (season one)

Once the project was proposed two days ago, the Veronica Mars Movie project not only met their goal (hitting $1 million in the first four hours and $2 million within first 24 hours) but have to date hit $3,309,450 and rising with over 50,000 backers. As I’m writing this, I have their project page open and the numbers are going up literally every 2 minutes. Now that the project has hit the dollar amount set, Warner Bros has indeed given the go-ahead for a summer start production date.

I reached out to some industry colleagues who’d used Kickstarter (in some instances, more than once) to find out what the deal is and what I know is what you need to know before you decide to jump in head first.

An important factor is having “all your ducks in a row” BEFORE proposing the project. Cupcake Quarterly Magazine‘s Elisa Teague successfully navigated Kickstarter for her special edition “Freaks and Geeks” pinup mag and is now working on another project that was also successfully funded by Kickstarter.

“I’m doing the graphic design for another project (not my own) that had a successful Kickstarter that closed today at over 1000% of the original goal. The promise of a successful campaign is there, but it takes a lot of work and planning to run a great campaign and I don’t think many people think it through. Kickstarter is not a get rich quick program, nor is it a pre-sale program. If you treat it the way it is intended and put the work and marketing in to your campaign, you will be successful.”

Just because you’ve reached your goal doesn’t mean you get all of it. Once Amazon and Kickstarter take their cut and expected losses from backers who’ve either forgotten that the funds aren’t taken from their bank account until the campaign ends or a snafu with Amazon’s billing (which happens but is rare), you’ll lose a bit of the revenue…so take all that into account when projecting your project’s desired monetary goal.

But like all things in this world, there is a downside to Kickstarter in the form of an “all-or-nothing” clause, meaning that if you are even a couple bucks shy of reaching projected goal, you get NONE of the funds raised (unlike Indiegogo, where you keep what’s been donated even if the goal’s not been met).

From the backers point of view, the triumphs and headaches are nearly the same.

Sara Thomson, who’s backed nearly 60 Kickstarter projects (focusing on film, video and publishing projects, donating around $20 to each one), says that while projects “gives people a method of creating when they don’t have enough money to do so,” and lets fans feel connected to the artist’s work (and in some cases, fans become friends) – being able to donate as little as one dollar (and feel like they’ve helped) along with the perks (most will provide a screensaver for the $1 backers) make Kickstarter appealing.

HOWEVER, there have been times when backers have donated and have experienced the equivalent of a “dine and dash.”

“It’s never happened to me, but some people say they just never hear from the person again and never get their reward. I haven’t looked into Kickstarter’s system for handling that though. I’ve had good luck. Only three of my rewards haven’t come in on time, but the people are still sending updates regularly explaining why.”

Exclusive one of a kind t-shirt (among with a host of other items) as part of a perk given for Double Fine Adventure backers who pledged $100

I, too, have experienced perks coming in later than originally scheduled, but luckily it was with RESPONSIBLE Kickstarter projects who kept in constant contact with their backers and eventually I happily received them.

And then there’s the perks themselves.

While I dig that Veronica Mars has fans who wanna see this happen enough to contribute over $3 million (especially for a show that only aired for three years), I’m not sure I quite agree with how much they asked for. My only hope is that Bell and Thomas put up some of their own money as well, because let’s face it, between films and her gig on Showtime’s House Of Lies, Bell isn’t exactly broke these days. And the fact that VM’s a Warner Bros. property (Thomas sold the rights a while back) the studio didn’t really wanna make in the first place and THEN for Thomas to say that the perks “only get good in the really high donation brackets,” (source: Turnstyle.com) cements everything I was pretty much thinking in the first place: you don’t get the goods or are aren’t a big fan UNLESS you’re willing to spend some serious coin…NOT COOL.

While the majority of Kickstarter projects perks begin at the $1 level, VM has bypassed that altogether and made the entry-level perk $10 and goes all the way up to $10,000.

Some of the higher end perks that involve the backer being a “featured extra” kind of raised an eyebrow with me as some of them are paying upwards of $8000 for said opportunity. While they are guaranteed to be on camera, eat lunch with the cast/crew, blahbity blah blah – “Extras will need to provide their own travel to our set, and their own lodging and transportation. Our best guesses on filming locations include Baton Rouge, Vancouver, San Diego or Los Angeles. We won’t be able to answer definitively until we see how much money we raise.”

So basically the fan who just donated what could pay my rent and bills for up to a year, may not even get to BE in the film because they can’t even afford to get to the location. My hope is now that it’s pretty much funded, they’ll let these backers know ASAP; I wouldn’t be surprised if they end up losing some coin when the location is revealed but with what they’ve garnered so far, should only be a drop in the bucket.

Kickstarter was known, to an extent, to helping out the little guy make the funds needed to branch out, while gauging if the public would really want to see their film/product/hear their album and feel some amount of vindication when the project not only meets the goal and then some. But with the Veronica Mars Movie initially asking for $2 million AND already have a major studio backing them along with Thor 2 star Zachary Levi now saying he too may try to fund a Chuck movie through the site, has Kickstarter gone from helping the little guy to something a little more, uh, corporate?

Lucas McNelly, filmmaker and columnist for TurnstyleNews.com sums it up with “If you’re famous enough, like really famous, you could theoretically run the worst Kickstarter campaign ever made and break every record Kickstarter has. Someone like Kanye West could do that in his sleep.”

Zachary Levi as everyone’s favorite Nerd Herd-er, Chuck (NBC)

Levi said “I really want to do [the Chuck movie] Kickstarter style. I want it to be something that the fans can all pitch in for…because we’ve always been supported and survived on our fans anyway.” Knowing his huge presence and interactions amongst his fans and nerd community at large, I’m inclined to believe him.

But it doesn’t change the fact that Levi isn’t exactly broke either and my fear is that if more A-list celebs with AMAZING connections are turning to Kickstarter for funding, where does that leave the little guy…and is it altogether fair?

Film producer and GeekNation co-founder Brian R. Keathley agrees, but also has an interesting suggestion:

“My biggest concern is it begins to blur the lines between studio films and small independents. More importantly, constantly beckoning the question as to what is actually a good-hearted attempt at getting a fan favorite made, or just clever marketing and financing by studio execs. What’s really interesting is this could be the beginning for what becomes ‘the standard’ for greenlighting films. I’ve been saying for two years they should do this with Firefly. What I’d really see come out of it is the SEC (Securities and Exchange Commission) changing some laws that would actually allow fans to own a piece of the film – Now THAT would be fair.”

I’ve also kicked in on several Kickstarter projects so I am DESPERATELY trying not to be cynical about the Veronica Mars windfall; it just makes me wonder if Kickstarter is stoked more about the project earning nearly twice the set goal because they know their cut will be fairly huge and I HATE that I’m even pondering that.